James West, CEO of the Macro stock agency Alamy, has reported some alarming trends in sales over the last quarter, with drops of between 30% and 70% from some of their UK newspaper customers in year on year figures.
Having spent a week visiting these customers, he reports:
"All of the people I met with made the following observations:
- Advertising revenues have fallen dramatically this quarter in most cases
- Print sales have been falling and will continue to do so
- Online versions of newspapers have yet to deliver a revenue stream comparable with that of print
- Most titles have been making redundancies in recent months
- Editorial budgets have been cut
- Further editorial cuts are anticipated
Newspapers are going through a painful transition period that is being exacerbated by the recession.
Most of the main titles think they will survive, but it is not yet clear what the right commercial
structure for them will be. The only thing that is certain is that difficult choices and further
cost reductions lie ahead of them."
He goes on to point out that Alamy is the largest supplier of imagery not to offer a subscription model to these newspapers and that Alamy is being squeezed out of this market by its bigger competitors.
"These deals are in addition to, and separate from, newswire subscriptions. In the past we have
managed to keep away from these deals because we represent a lot of material that isn't available
anywhere else. Unfortunately the recession is forcing a change in behaviour at the picture desks
that leaves little opportunity for image providers who don't offer unlimited downloads for a fixed fee.
To put this in context, our largest UK newspaper customer has ordered their picture desk to only download images from agencies they have subscription deals with." Mr West said.
He goes on to outline his ideas for a subscription model for these customers while inviting contributors to e-mail him with their thoughts and finishes with:
"We face a stark choice - either we adapt to match the competition, or we accept that UK newspaper
revenue will continue to decline sharply over 2009."
You can read James West's full letter HERE